There is some good tax news for those in the Old Dominion State.
Virginia is sending one-time tax rebates to residents in 2025. This continues the Commonwealth's practice of returning surplus funds directly to taxpayers as a form of financial relief.
The Youngkin administration states that Virginia has generated over $10 billion in surplus revenues over the past four years.
“Virginia’s strong job growth, bolstered by business investment commitments of $140 billion, has driven a total of $10 billion in surplus revenue and enabled a record $9 billion in tax relief,” Gov. Glenn Youngkin stated in a release regarding the rebates. “This fall’s tax rebate reflects a simple truth: it’s your money, not the government’s."
The move aligns with a trend where many states send residents so-called “stimulus" checks and tax rebate payments. However, this year, rebates come amid concerns across the country about inflation, tariffs, and the rising cost of living.
Here's more of what you need to know.
Virginia rebate checks for fall 2025
The 2025 Virginia tax rebate program is designed to provide direct financial relief to Virginians who had a state income tax liability for the 2024 tax year.
- To be eligible, taxpayers must file their Virginia state income tax returns by November 3, 2025
- The rebate amounts are set to be up to $200 for single filers and up to $400 for married couples filing jointly.
- However, the rebate cannot exceed the taxpayer’s actual state tax liability after all deductions and credits are applied. For example, if a single filer owes $150 in Virginia income tax, their rebate will be limited to that amount rather than the full $200.
Here is a summary of the 2025 rebate details:
Rebate Type |
Amount |
Filing Deadline |
Payment Window |
|---|---|---|---|
Single Filer |
Up to $200 |
Nov. 3, 2025 |
Begins on or before Oct. 15 |
Joint Filer |
Up to $400 |
Nov. 3 2025 |
Beginning on or before Oct. 15 |
*Those who file/filed before July 1 can reportedly look forward to receiving their rebate as early as mid-October 2025.
When Virginia tax rebates will be sent
- Payments started to be distributed in mid-October 2025 and continue to be issued, usually in the order in which returns were first filed.
- The Commonwealth typically issues payments via direct deposit for taxpayers who have previously set up this method; otherwise, rebates are sent by paper check.
You'll soon be able to check your rebate eligibility, track the status of your rebate, and update banking information if needed.
Note: Virginia has safeguards in place to address outstanding debts owed to state agencies. Under the Setoff Debt Collection Act, any rebate owed to a taxpayer with outstanding state debts may be applied to those debts first.
So, if your debts exceed the rebate amount, you will receive a notification explaining how the rebate was allocated.
Virginia tax changes for 2025
The rebates are part of a wider set of tax changes that will affect Virginia taxpayers in 2025.
Standard Deduction: One of the most notable adjustments is the increase in the Virginia standard deduction.
For tax years beginning January 1, 2025, through December 31, 2026, the standard deduction rises to $8,750 for single filers and $17,500 for married couples filing jointly. (That's up from $85,00 and $17,000 respectively.)
Note: The federal standard deduction has also increased for 2025.
Earned Income Tax Credit (EITC): Virginia is also enhancing its EITC. The refundable portion of the Commonwealth's EITC will increase to 20% of the federal credit, up from 15%.
The expansion is designed to provide additional support to working families with low- and moderate-income. You might also be eligible for the federal EITC.
Estimated Tax Payments: For self-employed individuals, freelancers, and small business owners, the threshold in Virginia for making estimated tax payments will increase from $150 to $1,000 starting with the 2025 tax year.
This change is supposed to reduce the administrative burden on taxpayers who previously had to make quarterly state payments on relatively small amounts of tax due.
Note: Virginia tax brackets didn’t change from 2024 to 2025. Income tax rates range from 2% to 5.75%, depending on income level.
Virginia governor election
Virginia tax policy is a topic this year, not only because of the rebates and tax changes but also due to the high-profile 2025 governor’s race.
This year’s election is historic, with both major party nominees being women: former U.S. Rep. Spanberger for the Democrats and current Lieutenant Gov. Winsome Earle-Sears for the Republicans.
Gov. Youngkin, who is ineligible to run for re-election due to Virginia’s prohibition on consecutive gubernatorial terms, has emphasized tax relief as a central theme of his administration.
Both Spanberger and Earle-Sears have made tax policy a point in their campaigns.
- For example, the car tax, which has been in place since 1782, remains a significant revenue source for local governments, funding schools, public safety, and other essential services.
- Local governments assess the car tax annually based on a vehicle’s value as of January 1. Vehicle owners receive a bill from their locality and pay the tax directly to the local government, typically twice a year in May and October.
- Eliminating the tax would reportedly require the state to compensate localities for lost revenue, with estimates ranging from $2.5 to $3 billion annually, according to various state budget analyses.
Earle-Sears has reportedly said the state can use its rainy day and reserve funds, along with recent budget surpluses, to compensate for the $2.5 to $3 billion local governments would lose each year. She has noted that Virginia’s healthy savings make that possible.
According to Axios, a spokesperson for Spanberger told reporters that the candidate also supports ending the car tax and would employ a bipartisan approach to evaluate ways to eliminate it.
Virginia taxes: What you can do now
If you haven’t already and are otherwise eligible, file your 2024 state income tax returns by the November 3 deadline to qualify for the tax rebate.
Stay informed about ongoing legislative discussions regarding potential reforms.
Also, remember: the November gubernatorial election outcome will impact tax and other policies in the Commonwealth.
